Frontline UK Employment Law Update Edition 10 2021 - Case Updates

1.Kostal UK Ltd v Dunkley and others [2021] UKSC 47

2.BX v Unitatea Administrativ Teritoriala D. (Case C-909/19) EU:C:2021:893

3.Sullivan v Bury Street Capital Ltd [2021] EWCA Civ 1694

4.R (on the application of Palmer) v Northern Derbyshire Magistrates' Court [2021] EWHC 3013 (Admin) (Divisional Court)

1. Kostal UK Ltd v Dunkley and others [2021] UKSC 47 - LINK

In this case the Supreme Court (“SC”) overturned the Court of Appeal’s (“CA”) decision and held that the Employment Tribunal (“ET”) had been entitled to find that pay offers made by the Respondent to the Claimants were in contravention of section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).

The 57 Claimants were members of Unite the Union (“Unite”) and were employed by the Respondent. In February 2015 the Respondent and Unite entered into a Recognition and Procedural Agreement (the “Agreement”) giving Unite “sole recognition and bargaining rights”, including in relation to pay, although the Agreement stated it did not “constitute a legally binding agreement”. In October 2015 pay negotiations commenced and after various meetings and discussions over several months, the Respondent’s offer was rejected by ballot of Unite’s members. The Respondent then made the same offer to employees directly. In May 2016 the Claimants complained to the ET that these direct offers were made in contravention of s 145B TULRCA.

S145B TULRCA provides that workers who are members of a trade union that is recognised (or seeking to be recognised) by their employer have the right not to receive offers from their employer that, if accepted (together with acceptance of other offers by other workers) would mean the workers’ terms of employment will not (or will no longer) be determined by collective agreement negotiated by the union (the “prohibited result”). The achievement of the prohibited result must have been the employer’s sole or main purpose in making the offers. The ET found in favour of the Claimants and made statutory awards for each Claimant totalling £421,800. It found that, as a matter of fact, the Respondent had “taken the conscious decision to by-pass further meaningful negotiations and contact with the union in favour of making direct offers to individual employees.” The Respondent then appealed to the Employment Appeal Tribunal (“EAT”) which upheld the ET’s decision.

On further appeal by the Respondent, the CA set aside the EAT’s and ET’s decisions. The CA held that where a trade union was recognised, a “prohibited result” would occur where the offer’s sole or main purpose was to contract permanently out of collective bargaining in respect of one or more terms of employment. In this case there had been a one-off direct offer and this did not amount to an unlawful inducement under s.145B TULRCA.

The Claimants appealed to the SC. The SC held that it was not necessary for the purpose of the offer to have been the permanent surrender of collective bargaining; it can apply to an inducement to surrender collective bargaining rights temporarily. As to whether acceptance of the offer would have prohibited the worker’s relevant terms of employment from being determined by collective agreement (rendering it unlawful), this is a matter of causation. For there to be a contravention of s145B TULRCA there needs to be “at least a real possibility” that if the offer had not been made and accepted, the terms of employment would have been determined by collective agreement. In this case, after the initial rejection of the offer by Unite’s members the Respondent did not proceed with the rest of the agreed collective bargaining procedure and instead went directly to employees. As the process had not been exhausted when the Respondent made the direct offers, this was a contravention of s145B TULRCA.

This case shows employers they need to be careful to follow agreed collective bargaining procedures even if a recognition agreement is stated not to be legally binding. Employers should follow and exhaust the relevant collective bargaining procedure before making offers directly to employees to avoid being caught out by s145B TULRCA. This case demonstrates that it is a risky (and potentially very costly) strategy to make direct offers as a workaround when negotiations with a trade union stall. Collective agreements should be as clear as possible as to the negotiation process, and how and when it is considered to have been completed, for maximum certainty.

2. BX v Unitatea Administrativ Teritoriala D. (Case C-909/19) EU:C:2021:893 - LINK

In this case the Court of Justice of the European Union (“CJEU”) held that for the purposes of the Working Time Directive (the “Directive”), time spent completing mandatory vocational training, as requested by the employer, at the training provider’s premises outside of normal working hours constitutes working time.

The Claimant was employed in Romania as a full-time firefighter. The Respondent employer instructed the Claimant to carry out 160 hours of vocational training which took place at the training provider’s premises. 124 hours of the training took place outside of the Claimant’s normal working hours. The Claimant brought a claim seeking payment of overtime for these 124 hours on the basis that they were working time.

The main question for the CJEU was whether time spent by a worker attending vocational training required by their employer at a provider’s premises, during which they do not perform their normal duties, would constitute working time under the Directive. The CJEU held that it would. The CJEU noted that under the Directive working time is defined as “any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties”. A “decisive factor” in determining this question was that the Claimant was required to be physically present at a place chosen by the employer and to remain available to immediately provide services to the employer if necessary. In situations where the worker is required to attend vocational training to be able to carry out their duties, and where the employer itself signed that vocational training contract with the provider, the worker is at their employer’s disposal within the meaning of the Directive during the training.

The CJEU held that it was irrelevant that the obligation to attend training arose from national legislation. It was also irrelevant whether or not the training took place outside of the worker’s normal working hours, as the concept of working time under Directive does not distinguish between time worked within normal working hours and time worked outside of such hours. It was also irrelevant that the training did not take place at the worker’s usual place of work – the employer had still required them to be physically present at a place of the employer’s choosing.

Although this decision post-dates the end of the Brexit transition period and so is not binding on UK courts, they may have regard to it if relevant, and so it may have a bearing on the interpretation of the training provisions of the Working Time Regulations 1998, which take a narrower approach than that taken by the CJEU and provide that only time spent on "relevant training" is working time. "Relevant training" excludes, inter alia, training where the immediate provider is a person whose main business is the provision of training, and which is provided on a course run by that institution or person.

3. Sullivan v Bury Street Capital Ltd [2021] EWCA Civ 1694 - LINK

In this case, the Court of Appeal (“CA”) upheld the decisions of the Employment Tribunal (“ET”) and the Employment Appeal Tribunal (“EAT”) that the Claimant did not have a disability within the meaning of section 6 of the Equality Act 2010 (“the Act”).

Under the Act, a disability is a physical or mental impairment which has a substantial and long-term adverse effect on the individual’s ability to carry out normal day-to-day activities. An effect is long-term if it has lasted or is likely to last for at least 12 months, or for the rest of the life of the affected individual.

In this case, the Claimant was dismissed in September 2017 as a result of his poor timekeeping, lack of communication, unauthorised absences, poor record keeping, and his attitude. The Claimant suffered from abnormal thoughts throughout his several years of employment, including paranoid delusions that he was under threat by Russian gangs, which he argued had a long-term substantial adverse effect on his ability to carry out day-to-day activities and impacted his performance at work.

The Claimant brought claims for unfair dismissal, discrimination arising from a disability, and indirect disability discrimination, among others. The ET found that the dismissal was procedurally unfair but that the same result would have been reached if a fair procedure had been followed, and dismissed the other claims. Importantly, the ET departed from a medical assessment stating that the Claimant did have a disability. Regarding the question of whether the Claimant was suffering from a long-term adverse effect, and whether the effect was likely to last for at least 12 months, the ET applied the test set out in SCA Packaging Ltd v Boyle that “likely” in this context means “could well happen”. Applying this test to the facts, the ET found that there had been two periods during his employment where the Claimant’s condition had substantial adverse effects on his ability to carry out normal activities, but that the adverse effects were not likely to have continued for at least 12 months.

The appeals to the EAT and the CA concerned whether the ET had applied the correct test in assessing whether the Claimant had a disability within the meaning of the Act. The EAT upheld the ET’s findings and the CA dismissed the Claimant’s further appeal. The CA found that the ET had considered the available evidence and had adequately explained its reasoning. Because its findings were not perverse, and because the ET had applied the correct legal test, there was no basis for an appeal against the ET’s factual findings.

This case is a useful example of the application of the statutory definition of disability. As was made clear in this case, medical opinion as to whether there is a disability will not always be conclusive, since the question of whether an employee comes within the statutory definition, and is thereby able to bring a disability-related claim, is a legal, rather than medical, one.